Reasons behind rapid Growth of Automobile Industry in India
India is seeing a rapid growth in the Automobile sector. It is attracting the major automobile industries from across the globe to expand their market to India. Some of the major reasons behind the rapid growth are
The Rapid Urbanization
As cities are growing, demand for two, three and four wheelers have increased. Besides the high demand for low cost two wheelers and cars from the urban dwellers, the demand for modern Agricultural equipments such as trucks and tractors from the farming population of rural India is also shooting up.
Affordable Vehicle Loans
Banks providing vehicle loans at lower interest rates and affordable EMI options are facilitating the vehicle buyers to procure the vehicles faster. Both two wheeler and car loans are available for different models from Indian banks.
The FDI Impact
The 100 percent allowance of Foreign Direct Investment in the automobile industry has lead to the influx of investment by major foreign automobile industry players. Japanese companies have already started their manufacturing units in India.
Also read Automobiles industry in India - Future,Trends & Statistics
Low cost and affordability
Due to increase in demand for low cost affordable two and four wheelers and high competition among the auto industries to supply the demand for vehicles in India has lead to a new market of low cost models of bikes, scooters and cars. This is encouraging the new consumers to own vehicles.
Other Contributing Factors
Some of the other factors contributing to the growth are demand for heavy vehicles, development of highways, marketing of the car and two wheeler companies, increase in demand from government public transport and government policies and taxes.
These are few of the reasons for rapid growth of Indian Auto industry. The reasons listed are mostly from the consumer end but the Auto industries are greatly performing to meet the demand and are equally contributing to the growth. Automobile Industries are a major contributor to economy and India’s Auto Industry is projected to have a great future.
